Mixed messages: Gender Pay Gap Reporting in 2021

There have been conflicting assessments of the impact of the pandemic on working women. Research has shown that more women than men have been furloughed on reduced pay, made redundant or spent a greater proportion of their time juggling work with home schooling and unpaid domestic tasks.  Contrast this with the view that the accelerated shift to remote and flexible working is a victory for working women, facilitating their ability to fit work around childcare, and it becomes unclear just how gender equality has really fared during the pandemic.  
A statistical blackhole
In February 2021, the EHRC announced that the gender pay gap reporting deadline would be postponed from 4 April to 5 October 2021, giving employers an additional six months in which to finalise and file their gender pay statistics.

This announcement followed on from the suspension of the reporting deadline the previous year, which led to little more than 50% of employers filing their pay gap reports, leaving a notable hole in information. Following suspension and then delay, what can we expect from 2021 reports?

Furloughed employees excluded

Gender pay gap reports are compiled using only the data of employees who are receiving full pay during the pay period in which the snapshot date (5 April) falls.  Those earning less than full pay, for example, by reason of sick leave, maternity leave or study leave, are excluded from pay (but not bonus) figures.  To the extent that it was unclear, the Government Equalities Office confirmed that furloughed employees, whose pay was not being topped up by employers to their usual full pay, should be excluded from pay reports.  This means that employees who were furloughed on less than full pay at the onset of the pandemic will not feature in 2020-21 pay reports.
A skewed picture
The pay statistics of employers who used the furlough scheme from its inception may well be markedly different to statistics reported in prior years.  It has been widely reported that significantly more women than men have been furloughed.  In addition, ONS data shows that lower paid workers were more likely to be furloughed on reduced pay.  Both these factors mean that low paid women are more likely to be excluded from pay calculations.  This may translate into an artificial increase in the average hourly rate of pay for women, incorrectly indicating that an employer has succeeded in narrowing its gender pay gap. 
Knowledge is power
At the time that the Gender Pay Gap Reporting Regulations 2017 were introduced, concern was expressed about the lack of enforcement measures for organisations that failed to comply with their obligations.  However, in 2018 and 2019, the fact that statistics were publicly available and widely reported on in the press demonstrated the power of information to shine a light on the issue of gender inequality in the workplace.

But the continued effectiveness of the regime depends upon accurate reporting and the ability to compare datasets year on year.  With the requirement to report suspended in 2020 and potentially misleading information to be published in 2021, this is now in jeopardy.

In its recently published consultation on flexible working, the Government confirmed that it would proceed with a review of the impact of gender pay gap reports in 2022.  The review must take account of the teething problems of the last two years and take steps to set gender pay gap reporting back on the right track.